USA Truck posts $3.3 million loss in 2010

Van Buren-based USA Truck Inc. continues to struggle with net income losses in 2010 and 2009 totaling more than $10 million.

The long-haul carrier reported Thursday (Jan. 27) a 2010 net income loss of $3.308 million, an improvement compared to a 2009 net income loss of $7.177 million. However, total revenue in 2010 was $460.161 million, up 20.3% compared to 2009. The 17-cent per share net income loss was also off analyst estimates of a 9-cent per share loss.

The ongoing national freight recession has been tough on USA Truck, which reported a 2009 net income loss of $7.177 million compared to a gain of $3.14 million in 2008. The company posted 2009 revenue of $382.36 million, down 28.6% compared to the $535.62 million in 2008.

Higher fuel and maintenance costs pushed a fourth quarter net income loss of $1.797 million, an improvement over the net income loss of $2.512 million in the fourth quarter of 2009. Unfortunately, the fourth quarter loss exceeded the $1.51 million income loss during the first nine months of 2010, and slowed down a trend of improving results.

Increased maintenance costs added 12 cents per share in expenses during the quarter.

The company explained: “Our maintenance costs remain stubbornly high as a result of (a) our older in-service tractor and trailer fleets, which had an average age of approximately 27 and 66 months, respectively, compared to approximately 27 and 62 months at the end of 2009, (b) the preparation costs we incurred as a result of increased equipment sales, (c) our continuing efforts to improve our safety and compliance performance, and (d) an increase in the costs recorded for tires placed into service.”

To reduce maintenance costs, the company is expediting its “tractor trade cycle” to buy in 2011 up to 600 new trucks and about 300 new trailers.

Clifton Beckham, USA Truck president and CEO, said improvements in trucking revenue per loaded mile, gains in brokerage and intermodal revenue were not enough to offset higher fuel prices, increase in maintenance costs and an increase in insurance claim costs. Those “headwinds” knocked earnings down by 23 cents per share, the company said.

"Overall, we are not satisfied with our absolute results during the fourth quarter of 2010, but we are pleased with our progress,” Beckham said in the statement. “While the pace of that progress is not always as fast or as linear as we would like, our commitment is to long-term results as prescribed by our VEVA (Vision for Economic Value Added) strategic plan."

Following are other financial highlights from the earnings report.
• For the year, the company generated $9.4 million additional free cash flow (cash flow from operations less net cash used in investing activities).

• At the end of the year, the company’s balance sheet was strengthened with $4.1 million less debt and a lower total debt less cash to total capitalization ratio (40.8% compared to 42.1% at the end of 2009).

• Base trucking revenue per loaded mile improved 9 cents (6.4%), empty mile factor declined to 10.1% (down 41 basis points) and loaded miles were up 3.3% (on 2.1% fleet growth, 10.3% load count growth and 0.6% better tractor utilization).

• Base revenue in Strategic Capacity Solutions, the company’s brokerage service offering, grew 142.9% to $10.1 million, and Intermodal base revenue increased 135.6% to $5.4 million.

• Increased fuel costs adversely impacted the quarter by 5 cents per share, driven by a 41-cents per gallon increase in the company’s average price at the pump. During the fourth quarter, the national average retail price of diesel fuel as reported by the U.S. Department of Energy rose during nine out of 13 weeks, including four consecutive weeks in December.

• An increase in claims activity during the quarter resulted in about 6 cents per share of additional insurance and claims expense.

USA Truck shares (NASDAQ: USAK), which are thinly traded, were down 8 cents in mid-day trading. During the past 52 weeks, the share price has ranged from a $18.79 high to a $12.05 low.